A favorable sale of $80 million in bonds by local school district staff resulted in a lower price tag to the taxpayers than authorities originally expected, by nearly $2 million.
Morgan Hill Unified School District officials noted in an Oct. 18 press release that the reduction in the projected cost of the bonds is a result of the district’s Aa1 credit rating from Moody’s Investors Services.
A majority of the second series, known as “Series B,” of MHUSD’s Measure G capital improvements bond will go toward the Britton Middle School Transformation Project, which is set to break ground by the end of the year.
The Aa1 mark is the highest rating a non-Basic Aid district can receive, and was based on the district’s strong fiscal position, sound management practices, and large and growing tax base, according to the district’s report.
“In response to market conditions and investor demand, interest rates on the bonds were lowered several times from the levels estimated prior to the sale,” MHUSD’s press release states. “The final lower interest rate levels for the bonds were over $1.9 million lower in debt service payments over the life of the bonds compared to what was presented to the Board of Education on Sept. 5.”
Series B’s $80 million will be paid back in installments over the next 30 years totalling $144,284,492—minus the $1.9 million reduction in the recent sale—by 2047, according to a Sept. 5 presentation by managing director Erica Gonzalez of Stifel, Nicolaus & Company.
A Series C bond issuance of $63,250,000  (the final of the Measure G monies) is scheduled for 2020.
More than 35 different institutional investors placed orders for the district’s bonds. Subscriptions or requests to purchase by investors were more than four times the total amount of bonds that were available to sell.
“Today’s sale surpassed our highest expectations for investors’ response showing the value and strength of our district,” said MHUSD Superintendent Steve Betando. “With a savings of nearly $2 million dollars to the taxpayers, we could not be more pleased with the result.”
Approved by voters in 2012, the $198 million school bond program, Measure G, is transforming MHUSD campuses by funding essential infrastructure upgrades, repairs and renovations to existing buildings and new construction.
At Britton, the estimated $50 million project will result in over 80,000 square feet of new learning space. The new campus will also include one primary quad and a number of auxiliary quads that can be used for outdoor learning spaces. A new student union building, which includes a scratch cooking kitchen for healthier options for student nutrition and learning opportunities, is also in the works. Additionally, a new parking lot and drop off/pick up area will replace the existing lot helping to ease congestion before and after school.
Nordstrom Elementary School and Jackson Academy of Math and Music will also benefit from this second series. At Nordstrom, the district plans to replace aged and outdated portables with new classroom buildings and will receive a larger multipurpose use space on campus. At JAMM, the project calls for a new regulation sized gymnasium that can support middle school athletics along with new performance spaces and classrooms to help support the music program.
“This continues to be an tremendous time for Morgan Hill Unified,” said MHUSD Director of Construction Casino Fajardo. “With Britton breaking ground in December, all of our stakeholders will get a first-hand look at the innovations we have coming to our district.”

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